All Forum Posts by: Christopher Smith

Meet up scheduled for September?

Read "What Every Real Estate Investor Needs To Know About Cash Flow" by Frank Gallinelli. I keep it with me for reference.

Remember: income property is different than purchasing a home. You are valuing the income flow not so much the building. The building is only as valuable as the income generated.

Look for mismanaged properties and buy at wholesale. Wholesale is based on current income. Often times people who have a lot of equity with long term ownership get lazy and sit on the property as is. Look for ways to improve the property to increase the income. A BP podcast had just discussed this idea. Never underestimate the importance of property management to enhance value and increase cash flow.

HOA costs can change drastically in one year. You need a financial cushion to be prepared for this possibility and more importantly do your due diligence on this condo association. You want no surprises. Check out BP for info on HOA's. Good Luck.

Thanks

Was hoping for discussion on Cap Rates for multi family income property recently purchased in Madison Wi area. Anyone care to share their numbers?

In Florida the reassessment is capped at 3% increase per year under the same ownership. That changes when property is sold. The point is the seller could say it was reassessed last year but that could be much less than a new owner will be assessed.

(More on Florida)

In Florida, the Save Our Homes Amendment to the Florida Constitution prevents the assessed value of homestead property from increasing more than 3% per year, or the percent change in the Consumer Price Index, whichever is lower. While the tax savings from the Save Our Homes Amendment has no doubt helped many homeowners to stay in their homes even when values were rising, it also tended to discourage homeowners from moving to a new residence, for fear of giving up all of their accumulated property tax savings. In 2008, Florida voters attempted to change that by amending the Florida Constitution to allow for “portability” of their accumulated homestead exemption tax savings.

I just checked my communities website and it gave me a rate of 2.08 which I multiply times the assessed value which is different than market value. The Madison Wi website said assessed value is about 96% of market value but differs in different school districts. My understanding is different areas of the country handle reassessing properties differently. Some protect the elderly by not reassessing until property is sold, others reassess every few years.

Looking for insight on cap rates for Madison Wi., Dane County Wi.